UK Equity Income returns to favour in September

UK Equity Income saw a sharp spike in sales in September, reversing a trend prevalent in previous months, according to the latest trends on the Cofunds platform.

The sector - which has previously suffered redemptions - saw a significant increase in net sales in September, leaping from 14th position in August to become the fourth most popular sector.

It accounted for 6.7% of net sales last month, its highest level since 2009, as it doubled its year-to-date net sales average.

Invesco Perpetual High Income and Threadneedle UK Equity Income helped power the sector up the sales chart, with both featuring in the top 20 selling funds.

Meanwhile, Cautious Managed held its position as the most popular sector, accounting for more than a third of net sales.

Strategic Bond and Global grabbed second and third most popular sectors respectively, both showing consistent net sales compared with their year to date averages.

But Michelle Woodburn, Cofunds manager, fund group relations, said the real surprise of the month was the performance of UK Equity Income.

"This sector has always performed relatively well in terms of gross sales but, due to redemptions, the net position has been dragged down over the last two years," she said. "This large increase is a clear sign these redemptions are curtailing."

Elswhere, investment in Absolute Return funds has significantly dropped off, accounting for only 1% of net sales in September despite continued turmoil.

This trend, said Woodburn, is consistent with IMA reporting.

September 2011 Net Sales

1 Thames River Distribution
2 Newton Global Higher Income
3 Premier Multi-Asset Distribution
4 M&G Optimal Income
5 M&G Global Dividend
6 Invesco Perpetual High Income
7 Invesco Perpetual Distribution
8 Henderson MM Distribution
9 SWIP Multi-Manager Diversity
10 Aberdeen MM Cautious Managed
11 Threadneedle UK Equity Income
12 Newton Real Return
13 M&G Recovery
14 Invesco Perpetual Monthly Income
15 Jupiter Merlin Income Portfolio
16 CF Miton Special Situations Port.
17 HSBC Open Global Distribution
18 Henderson MM Inc & Grwth
19 Thames River Cautious Managed
20 M&G Strategic Corporate Bond